Last updated on October 3rd, 2023 at 08:21 am
The best time to invest in crypto was back in 2009. The second best time is now.
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Cryptocurrencies are a fast-growing investment sector, with more than 1,000 coins and tokens now listed on CoinMarketCap.com. From popular cryptocurrencies like Bitcoin and Ethereum to lesser known ones like Cardano and Cosmos, the investment opportunities are exploding. So is it currently a good time to invest in crypto?
This article is not financial advice. I am an investor but I am not a financial advisor or a market expert. The information provided here is to be used at your own risk. In no way is the information here to be interpreted as advice. You can lose money investing in cryptocurrency.
Are Cryptocurrencies New and Dangerous?
Cryptocurrencies have been around for several years now. But in the last couple of years, they have become very popular because of their potential to change the world. The cryptocurrency market provides a new opportunity to invest for your retirement.
Cryptocurrencies are also called digital currencies because they use cryptography to secure transactions. They are decentralized systems where no one can control them. This why many people have become investors in cryptocurrencies. It’s a way to get away from large financial institutions like banks and stock brokers that may have taken advantage of them.
It is important to know that digital currencies can be volatile, and that it’s not possible to predict what will happen to them in the future. You should also know that like any other investment, you can make or lose money investing in cryptocurrencies.
The cryptocurrency market is one of the most volatile markets in the world. It has been known to reach up to 10,000% in value within a matter of days and drop by nearly as much. Therefore, if you are investing in cryptocurrencies, you need to be careful and invest only what you can afford to lose.
When Should I Invest in Crypto?
I’m not an investment expert, but I usually follow the philosophy that it’s almost always better to own an asset rather than sit on the cash (aside from the cash you need on hand for emergencies & daily expenses). This philosophy is the same with stocks and bonds.
The best time to invest in crypto was probably back in the early days of Bitcoin when you could buy it for pennies. In fact, for most folks reading this, that was probably the investment opportunity of your lifetime – and you missed it like most of us because Bitcoin was difficult to understand, scary new, and figuring out even how to acquire it was a challenge.
The second best time to invest is now. You’ve probably heard this statement before with regards to stocks and it’s true with most investments. You could attempt to time the market, but generally those who invest regularly at fixed intervals (dollar cost averaging) will outperform those who try to buy the dip.
All cryptocurrencies are not equal. Bitcoin is now considered to be something more akin to ‘digital gold’ and might only ever be used as digital storage place for money rather than a useable currency. Other digital currencies like Ethereum and Stellar Lumens show more promise in being utilized as an actual currency to purchase goods and services. And yet there are other coins with no real use-case other than speculative trading for quick profits (and losses) such as Shiba Inu.
How Should I Invest?
For beginners, using a centralized exchange run by a reputable company like Coinbase or Crypto.com might be the easiest way to get into owning Crypto. These exchanges do have fees or spreads to help finance their operation and make their own profit, but they are the easiest way to get into the crypto game. Some traditional stock brokers like Webull are also partnering up with crypto exchanges to offer crypto holdings right within your stock portfolio though they usually only offer the most popular options such as Bitcoin.
Many Cryptocurrency exchanges have rewards programs like Visa debit cards you can preload with money and get cryptocurrency rewards when using them for spending. Just like a cashback program you see from credit cards. Crypto.com and Coinbase have some of the best rewards rates for most US-based customers. These programs allow you to become an investor in cryptocurrency with a zero cost. Coinbase even lets you designate a specific cryptocurrency to use for purchases when you use their Visa cards – this is truly the next step to using crypto as a true digital currency.
You can also hold crypto in your own digital wallet without using an exchange, though this is outside my intended scope of this article. Other ways investors acquire crypto include mining, staking, or simply accepting crypto payments from your own customers if you’re a business.
Like all investments, it’s usually a bad idea to invest in cryptocurrency using credit cards or loans – invest with money you have set aside for investing only.
You’ll have to figure out what works for you, and what your acceptable risk level is, but I tend to follow a conservative approach to my investing by putting most of my money in more established cryptocurrencies like Bitcoin and Ethereum and then spreading a smaller amount among other more speculative ones.
The most important thing to remember is that investing in crypto is not for everyone. If you don’t know what you’re doing, you can lose money. Heck, you can lose money even if you do know what you’re doing. But if you are willing to put in some time learning about the cryptocurrency market, there’s a good chance that you’ll be able to earn a strong return.